Osborne and Gaebler argue that a revolutionary restructuring of the public sector is under way — an "American Perestroika." Like the Soviet version, they believe this one is being driven largely by politicians and bureaucrats who, under great fiscal pressure, are introducing market forces into monopolistic government enterprises. In this book, they integrate hundreds of examples of these initiatives into a basically new concept of how government should function. This concept is organized into ten chapters, reflecting the ten operating principles that distinguish a new "entrepreneurial" form of government.

Osborne and Gaebler suggest that governments should: 1) steer, not row (or as Mario Cuomo put it, "it is not government's obligation to provide services, but to see that they're provided"); 2) empower communities to solve their own problems rather than simply deliver services; 3) encourage competition rather than monopolies; 4) be driven by missions, rather than rules; 5) be results-oriented by funding outcomes rather than inputs; 6) meet the needs of the customer, not the bureaucracy; 7) concentrate on earning money rather than spending it; 8) invest in preventing problems rather than curing crises; 9) decentralize authority; and 10) solve problems by influencing market forces rather than creating public programs.

The authors insist that this book does not offer original ideas. Rather, it is a comprehensive compilation of the ideas and experiences of innovative practitioners and activists across the country. The authors build on the work of a handful of political scientists who have studied bureaucratic reform efforts, especially that of James Q. Wilson, whose 1989 book Bureaucracy laid out key elements of what they call "a new paradigm." They also count Robert Reich, Alvin Toffler, and Harry Boyte among their chief influences. As they point out in the acknowledgements, however, the biggest influence on their thinking comes not from government but from management consultants like Thomas Peters, Edward Deming, and Peter Drucker. These writers all recognize that corporations suffer from bureaucratic rigidities just like governments do, and that the structures of both are rooted in bygone eras. Too many corporations are still bound to the strict work rules and centralized command that marked the Industrial Age, they insist. Similarly, most government agencies are bound by civil service rules and other Progressive era reforms designed to control costs, eliminate patronage, and guarantee uniform service to the public. "Hierarchical, centralized bureaucracies designed in the 1930s or 1940s simply do not function well in the rapidly changing, information-rich, knowledge-intensive society and economy of the 1990s," they write. Suffering from the same rigidities, governments and businesses must transform themselves in essentially the same way: by flattening hierarchies, decentralizing decision-making, pursuing productivity-enhancing technologies, and stressing quality and customer satisfaction.

Osborne and Gaebler are careful to point out that while much of what is discussed in the book could be summed up under the category of market-oriented government, markets are only half the answer. Markets are impersonal, unforgiving, and, even under the most structured circumstances, inequitable, they point out. As such, they must be coupled with "the warmth and caring of families and neighborhoods and communities." They conclude that entrepreneurial governments must embrace both markets and community as they begin to shift away from administrative bureaucracies.